real #unemployment 42.9%: the warren buffett economy #scprimary

As documented in Parts 1-3 (Part 1, Part 2, Part 3), the Fed has generated a $50 trillion financial bubble since Alan Greenspan took the helm in August 1987. After 27 years, honest price discovery has been destroyed, thereby reducing the nerve centers of capitalism—-the money and capital markets—-to little more than gambling casinos.

Accordingly, speculative rent-seeking in the financial arena has replaced enterprenurial innovation and supply side investment and productivity as the modus operandi of the US economy. This has resulted in a severe diminution of main street growth and a massive redistribution of windfall wealth to the tiny share of households which own most of the financial assets. Warren Buffett’s $73 billion net worth is the poster boy for this untoward state of affairs.

unemployment

The massive and systematic falsification of asset prices which lies at the heart of this deformation of capitalism is a direct and unavoidable consequence of monetary central planning. That is, the pursuit of Keynesian business cycle management and stimulus through central bank interest rate pegging and massive monetization of existing public debt and other securities—-especially since the latter has no purpose other than to artificially goose the price of bonds and lower their yields; and also via other indirect  methods of financial asset levitation such as the Greenspan/Bernanke/Yellen doctrine of wealth effects and the implicit central bank “put” which underpins the economics of buy-the-dip speculators.

As previously indicated, the Keynesian bathtub model of a closed, volumetrically driven economy is a throwback to specious theories about the inherent business cycle instabilities of market capitalism that originated during the Great Depression. These theories were wrong then, but utterly irrelevant in today’s globally open and technologically dynamic post-industrial economy.

As reviewed in Part 3, the very idea that 12 people sitting on the FOMC can adroitly manipulate an economic ether called “aggregate demand” by means of falsifying market interest rates is a bad joke when in it comes to that part of “potential GDP” comprised of goods production capacity. In today’s world of open trade and massive excess industrial capacity, the Fed can do exactly nothing to cause the domestic steel industry’s capacity utilization rate to be 90% or 65%.

It all depends upon the marginal cost of labor, capital and materials in the vastly oversized global steel market. Indeed, the only thing that the denizens of the monetary politburo can do about capacity utilization in any domestic industry is to re-read Keynes’s 1930 essay in favor of homespun goods and weep!

As I detailed in the Great Deformation, the Great Thinker actually came out for stringent protectionism and economic autarky six years before he published the General  Theory and for good and logical reasons that his contemporary followers choose to completely ignore. Namely, protectionism and autarky are an absolutely necessary correlate to state management of the business cycle and related efforts to improve upon the unguided results generated by business, labor and investors on the free market.  Indeed, Keynes took special care to make sure that his works were always translated into German, and averred that Nazi Germany was the ideal test bed for his economic remedies.

Eighty years on from Keynes’ incomprehensible ode to statist economics and thorough-going protectionism, the idea of state management of the business cycle in one country is even more preposterous. Potential labor supply is a function of the global labor cost curve and now comes in atomized form as hours, gigs, and temp agency contractual bits, not census bureau headcounts.

In fact, the Census Bureau survey takers and the BLS numbers crunchers have not the foggiest idea as to what the real world’s potential labor force computes to, and how much of it is deployed on any given day, month or quarter. Accordingly, printing money and pegging interest rates in pursuit of “full employment”, which is the essence of the Yellen version of monetary central planning, is completely nonsensical.

Likewise, the Fed’s current “soft” target of 5.2% on the U-3 unemployment rate is downright ridiculous. When in the year 2015 you have 93 million adults not in the labor force—-of which only half are retired and receiving social security benefits(OASI)—-and a U-3 computational method that counts as “employed” anyone who works only a few hour per week—-then what you have in the resulting fraction is noise, pure and simple. The U-3 unemployment rate as a proxy for full employment does not even make it as primitive grade school economics.

At the present time, there are 210 million adult Americans between the ages of 16 and 68—to take a plausible measure of the potential work force. That amounts to 420 billion potential labor hours, if we accept the convention that all adults are at least theoretically capable of holding a full-time job (2,000 hours/year) and pulling their share of society’s need for production and work effort.

By contrast, during 2014 only 240 billion hours were actually supplied to the US economy, according to the BLS estimates. Technically, therefore, there were 180 billion unemployed labor hours, meaning that the real unemployment rate was 42.9%, not 5.5%!

Yes, we have to allow for non-working wives, students, the disabled, early retirees and coupon clippers. We also have drifters, grifters, welfare cheats, bums and people between jobs, enrolled in training programs, on sabbaticals and much else.

But here’s the thing. There are dozens of reasons for 180 billion unemployed labor hours, but whether the Fed is monetizing $80 billion of public debt per month or not, and whether the money market interest rate is 10 bps or 35 bps doesn’t even make the top 25 reasons for unutilized adult labor. What actually drives our current 43% unemployment rate is global economic forces of cheap labor and new productive capacity throughout the EM and dozens of domestic policy and cultural factors that influence the decision to work or not.

To be sure, for a brief historical interval—-from roughly the New Economics of the Kennedy Administration to the 2007 eve of the housing crash and financial crisis—- the Fed did levitate the GDP and meaningfully impact the labor utilization rate. That was owing to the one-time trick of levering up the household and business sector through the inducements of cheap debt.

The Warren Buffett Economy——Why Its Days Are Numbered (Part 4)

 

global terror (#islam) spiked 81% in 2014 (@barackobama’s islam killed 32,727)

WASHINGTON, June 19 (UPI) — The State Department said the number of terrorist attacks and people killed by terrorists worldwide spiked in 2014, largely due to the rise in Islamic State extremists in the Middle East and the Boko Haram in Africa.

The annual Country Report on Terrorism found terror groups have ramped up their ability to inflict mass casualties, saying the total number of terrorist-attack-related fatalities jumped 81 percent to 32,727 in 2014. The total number of attacks increased by 35 percent to 13,463. Pakistan and India terrorist activities also contributed to the increase, the report said. More than 9,400 people were taken hostage or kidnapped, three times more than in 2013.

The report stated the IS, also known as ISIS and ISIL, has replaced al-Qaida as a major extremist group.

“The prominence of the threat once posed by core al-Qaida diminished in 2014, largely as a result of continued leadership losses suffered by the AQ core in Pakistan and Afghanistan,” the report said. “AQ leadership also appeared to lose momentum as the self-styled leader of a global movement in the face of ISIL’s rapid expansion and proclamation of a Caliphate.”

When asked by reporters at a State Department briefing Friday about the effectiveness of the U.S. in combating terrorism globally, Tina Kaidanow, the department’s coordinator for counterterrorism, said “the numbers don’t tell the whole story.”

“They’re geographically very much in conflict areas and the lethality of those attacks have really gone up because of the savagery of them,” she said.

The report blamed weak and failed governments, especially in Syria, Iraq, Yemen and Libya, for offering an “enabling environment” for such groups.

State Department: Global terror-attack fatalities spiked 81 percent in 2014

#trump: i’d ‘love’ to have #palin in my admin in an official capacity (#palin2016)

Republican presidential candidate Donald Trump said he would “love” to have former Alaska Governor and GOP vice presidential candidate Sarah Palin in his campaign in an official capacity on Monday’s broadcast of “The Palin Update” on Mama Grizzly Radio.

Trump said of Palin being “along in some official capacity, “I’d love that.” He continued, “Because she really is somebody that knows what’s happening, and she’s a special person, she’s really a special person, and I think people know that. And she’s got a following that’s unbelievable. … Everybody loves her.”

He added that the other GOP candidates are “weak” and “ineffective,” and “the Sarah Palin kind of strength, you just don’t see very much of it anymore.”

(h/t Right Wing Watch)

TRUMP: I’D ‘LOVE’ TO HAVE PALIN IN MY ADMIN IN AN OFFICIAL CAPACITY

Donald Trump Would Consider Tapping Sarah Palin For Future Trump Administration

#trump interview: ‘admire #palin’ political media ‘amazingly dishonest’ (#palin2016)

In the Palin Update radio program released Monday, host Kevin Scholla interviews 2016 Presidential candidate and American success story Donald Trump, offers his admiration for Governor Palin.

In addition, Trump gave his take on the “amazingly dishonest” political media, taking on “weak, ineffective” politicians in both major political parties, the pathetic treatment of veterans, “nuclear climate change,” his run for the White House, and how he plans to make America great again.

Scholla opened by noting the massive media attacks against Trump, reminiscent of severe attacks on former Alaska Governor Sarah Palin.

“One of the things I most admire about her (Palin) is that she took so much nonsense, lies and disgusting lies. She handles it so well. She’s tough and smart and just a great woman so it’s an honor to be with you today,” Trump said. “I still have people saying, get Sarah’s support, get Sarah’s support, no matter where I go…everybody loves her.”

Scholla recalled that Palin and Trump have had several meetings, including one during Palin’s Monument Tour, when they sat down for pizza in New York City.

Scholla asked Trump whether he would seek out Palin’s counsel or might he bring her along in an “official capacity” in the event of a Trump administration.

“I’d love that because she really is somebody that knows what’s happening,” Trump responded. He noted that her “following that is unbelievable,” calling those supporters a “tremendously loyal group of people out there for her. I think now maybe more so than ever.” He continued, “I’m looking at some of these candidates, they’re weak, they’re ineffective.”

Trump referenced the volumes of Americans that “like the Sarah Palin kind of strength. You just don’t see very much of it anymore.”

Scholla asked Trump about calling out weak politicians such as Barack Obama and Hillary Clinton, as well as Jeb Bush,

Sen. John McCain (R-AZ)

43%

, and Lindsay Graham.

“That’s right they’re not doing their job,” Trump responded. “You look at what’s happening with the veterans. The veterans are being treated like third class citizens. It’s horrible what’s going on and John McCain is so involved with the veterans, but nothing happens because they’re politicians ultimately.”

Trump then went after selective media reporting. “It’s interesting, cause I know the same thing would happen to Sarah a lot. When somebody attacks me viciously, you know they call me names, horrible names, then I attack them (attackers), they (media) don’t report what they other people said so it looks like I’m just, out of nowhere making things up about like a Lindsay Graham or this character Rick Perry. That’s another beauty, all of a sudden he attacks and you attack back and you say something very rational, but they (media) don’t show that you aren’t the one that started it.”

“The political media is amazingly dishonest,” Trump told the listening audience.

Last week Palin commented on McCain and Trump based on her relationship with each of the two men. “Both men have more in common than the today’s media hype would have you believe.” She noted McCain’s heroic service to the country as well as Trump’s heroism “in another arena.”

Trump is the candidate giving voice to untold millions of fed-up Americans witnessing a purposeful destruction of our economy and the equal opportunity for success that made America exceptional. We’re watching career politicians throw away our kids’ future through bankrupting public budgets and ripping open our porous borders which, obvious to all us non-politicians, puts us at great risk. Everywhere I go, hard-working patriotic Americans – not “crazies” or “wacko birds” – ask me to pass on to Mr. Trump encouragement to keep educating the masses about true ramifications of illegal immigration, and in general the real state of our union.

Trump referenced a recent poll out of Nevada, which he commented on during his trip to the U.S.-Mexico border last week as well. The poll puts him significantly in the lead of the GOP field of 2016 Presidential candidates and shows considerable Hispanic support. Trump said this is because he will bring back jobs, and that is what resonates with Americans. His campaign slogan, “Make America Great Again.”

“The real climate change is going to be nuclear climate change if we’re not smart and tough and very, very careful cause that’s a big danger and that’s a real danger,” Trump then commented regarding Obama’s climate change agenda. “We have people chopping off heads and he’s (Obama) talking about climate change.”

The 2016 candidate recalled some early work on former President Ronald Reagan’s campaign.

Trump and Scholla discussed recent events involving Planned Parenthood, the Chattanooga attack, and the Iran deal. They noted the proclivity of many candidates today to check polling data before issuing their opinions on issues instead of speaking with conviction from the heart.

Trump noted Bush’s apprehension in answering with his position onwhether going into Iraq was a good idea. “You have to say what’s in your heart, what’s in your brain and you have to be honest. I mean these guys go back, they don’t want to give an answer until they have it polled and that’s not government in my opinion.”

Both Palin and Trump have stared down aggressive media attacks. Palin commented on June 17, “Mr. Trump should know he’s doing something right when the malcontents go ballistic in the press! There is no denying Donald J. Trump‘s accomplishments and drive to create opportunity for every willing American to succeed.”

Trump called Palin revered, saying she, “is somebody that people respect and admire and she speaks to so many people. I don’t think even think she knows how important she is and maybe that’s part of the beauty of Sarah Palin.”

Trump closed, “Right now this country’s going down and its going down badly and quickly and Sarah understood that maybe earlier than most, but our country’s going down and we have to make it great again.”

Scholla told Breitbart News following the interview, “Mr. Trump is a good man who cares deeply for our veterans and America as a whole. Just like Sarah Palin he’s not afraid to call out politicians from either side of the aisle if they are doing harm to our nation. In talking to Mr. Trump I get the sense that he is genuine. His admiration for Governor Palin is undeniable and there’s no doubt he loves our exceptional country.”

You can listen to the program and interview in its entirety at Mama Grizzly Radio.

TRUMP INTERVIEW: ‘ADMIRE PALIN,’ POLITICAL MEDIA ‘AMAZINGLY DISHONEST,’ REAL CLIMATE CHANGE ‘NUCLEAR’

governor sarah #palin accomplishments #palin2016

Yes, a candidate should have a record. I challenge all potential candidates to match this. To be fair and give other candidates a fair chance, I did not include her achievements as a Council woman or Mayor, though these achievements must be duly noted by all.  Besides, I was getting tired from typing.

Here’s our Candidate’s Record…Governor Sarah Palin

You will notice she serves for the people; she prioritizes, cutting taxes, building surpluses and savings, then appropriates to programs that help education, seniors, and children with special needs!

  • 93% Historic High approval rating
  • Cut State Spending 9.5% 2007 to 2010
  • Reduced Federal Earmarks 80%
  • Invested $5 billion dollars State Savings
  • Overhauled Education Funding
  • Implemented Senior Benefits Program
  • Used her authority to Line item VETO to cut superfluous spending in 2007
  • Used her authority in 2008 to VETO 361 line items to reduce $80.3 million in proposed spending in 2009
  • Cut SPENDING more than 33% in FY 2010 from FY 2009’s Budget
  • Signed energy legislation suspending the state motor fuel tax
  • Signed legislation opposing a Federal Aviation fuel tax
  • Lowered unemployment insurance tax rates (2 years in a row)
  • Reformed State Pension program resulting in decreasing debt liabilities by 34%
  • Her fiscal policies were responsible for Credit upgrade from AA to AA+ in April 2008 (Standard and Poor)
  • Her fiscal policies were responsible for Credit upgrade from AA+ to AAA in November 2010 (Moody’s)
  • Accumulation of multiple budget reserves equal to more than 200% of the general fund budget due to Legislation like ACES
  • $12 Billion dollars in savings due to ACES and a $5 Billion dollar surplus
  • Spent less on travel expenses than her two predecessors despite having a larger family. $913 Thousand less her first two years than Murkowski did his last two years
  • She rejected a gubernatorial pay raise
  • Signed ACES, a net tax on oil profits passed in a bipartisan manner and transparency. Constituents had 17 days to read a draft of the bill before legislators discussed it
  • Record number of oil jobs in each year from 2007, when ACES was implemented, to 2009
  • Number of Oil companies filling taxes with the state doubled between 2006 and 2009 due to ACES
  • Natural resources and logging jobs increased 13.7% during Palins tenure
  • Introduced the Alaska Gasoline Inducement Act (AGIA) in March 2007. Passed the Legislature in huge bipartisan manner by a vote of 57-1 in May 2007
  • Served as Vice Chair of the National Governors Association
  • Served as the Natural Resource Committee and Chairman of the Interstate Oil & Gas Compact Commission
  • Chair, Alaska Oil and Gas Conservation Commission
  • Alaska was 2nd in job growth compared to all other states during her leadership
  • Alaska was 3rd in the nation in terms of change in the unemployment rate relative to the national average
  • Alaska saw record number of oil jobs in both 2008 and 2009.
  • Cut business license fees in half during her tenure
  • Alaska moved up from the 4th most business tax friendly state to the 3rd most business
  • friendly state during her tenure
  • Signed legislation allowing Alaska-based businesses the same opportunities as our of state businesses, within Alaska
  • Alaska’s exports grew to a record high $4 Billion in 2006, a 12.6% increase
  • Alaska’s exports for 2007 reached $3.9 Billion, the second best year for exports
  • Fought for and signed sweeping BIPARTISAN Ethics legislation which restricted lobbyists, improved disclosure laws, and improved executive and legislative branch ethics laws
  • In the face of corruption Gov. Palin took on her own party
  • Gov. Palin opened up natural gas pipeline deals to all potential parties
  • Gov. Palin DID NOT ALLOW lobbyists in her office
  • Forward funded EDUCATION to allow districts greater flexibility.
  • Supported increased vocational training and early education funding
  • Offered to PERSONALLY TALK to students considering dropping out of school
  • Opened up opportunity to Alaskan students to participate in regional medical school
  • Increased overall funding for SPECIAL NEEDS EDUCATION 175%
  • Increased funding for the Alaska Youth Challenge Academy 18.8% in her first year in office
  • Gov. Palin’s FY 2008 Capital budget included $2.5 Million for special needs housing which included $250 Thousand for SPECIAL OLYMPICS facility upgrades
  • Introduced health care TRANSPARENCY LEGISLATION to provide consumers factual information on QUALITY and COST to make better informed decisions
  • Recognized that healthcare must be MARKET AND BUSINESS driven, rather than RESTRICTED by Government
  • Proposed repeal of Certificate of Need- A layer of bureaucracy that prevents medical facility development
  • ESTABLISHED the Alaska Health Strategies Planning Council in the Office of the Governor
  • REDUCED Medicaid assessments for Seniors, those who are disabled and those who are ill by 83% of her predecessor
  • EXPANDED Alaska’s Senior benefits program even signing emergency authorization between the legislatures general and special sessions
  • Joined multi-state amicus brief authored by the state of Texas in support of the 2nd Amendment right of individual Americans to bear arms
  • Life member of the National Rifle Association
  • Chose to monitor rather than participate in national standards for education noting state and local standards and accountability are better
  • Transitioned responsibility for the quality of Alaska water resources from Federal to STATE CONTROL
  • Commander in chief of National Guard and also the Alaska State Defense Force
  • Shared STRATGIC COMMAND over the 49th Missile Defense Battalion of the Alaskan National Guard which is on permanent duty
  • Gov. Palin was briefed on highly classified military issues, Homeland Security, and Counterterrorism
  • Supports both parental notification and parental consent laws for abortion
  • Supported state constitutional amendments or legislation that would have stated abortion is not a right & made coerced abortion a crime
  • Signed the “Safe Haven” bill into law
  • Extended the Council on Domestic Violence and Sexual Assault
  • Made it Mandatory that the governor and the Board of Parole to work together to ensure any decision on clemency is based on a thorough review of the case and made in deference to victims and their families
  • Expanded Alaska Homeless Council
  • Directed multi departmental effort to improve aviation safety
  • Signed aviation, consumer protection legislation

By Wayne Mazza: Full List Governor Palin Accomplishments & Views on Issues

governor #palin: highest favorability in gop 2016 field #palin2016

PalinObama

Though former Alaska Gov. Sarah Palin was not included in a Public Policy Polling survey of potential 2016 Republican presidential contenders, she was still overwhelmingly the most liked person among Republican primary voters.

According to Public Policy Polling:

The best liked person we tested on this poll with Republican primary voters is actually Sarah Palin who has a 70/20 favorability rating. She’s followed by Huckabee at 64/18, Ryan at 58/18, Paul at 58/21, Bush at 56/18, Cruz at 45/20, and Christie at 40/38. Most of those numbers are similar to what they were a month ago but Christie’s seen a substantial drop from +18 at 47/29 a month ago to his new +2 net favorability.

The left-leaning polling outfit asked Republican primary voters, “Given the choices of Jeb Bush, Chris Christie, Ted Cruz, Mike Huckabee, Bobby Jindal, Rand Paul, Marco Rubio, Paul Ryan, and Scott Walker, who would you most like to see as the GOP candidate for President in 2016?”

Huckabee led among the group with 16% to 14% for former Florida Gov. Jeb Bush; 13% for Chris Christie; 11% for Sen. Rand Paul (R-KY); 8% each for Sens. Ted Cruz (R-TX), Marco Rubio (R-FL), and Paul Ryan (R-WI); 6% for Wisconsin Gov. Scott Walker; and 5% for Louisiana Gov. Bobby Jindal. Ten percent of respondents either wanted someone else or were unsure of their preference.

The poll asked respondents how they viewed Palin in a separate question at the conclusion of the poll, and Palin’s favorability numbers show why former South Carolina Senator and Heritage Foundation President Jim DeMint said that Palin’s endorsement was the most influential in a Republican primary. The poll was conducted January 23 to 26 and has a margin of error of +/- 4.6 percentage points.

Breitbart’s Tony Lee: POLL: SARAH PALIN HAS HIGHEST FAVORABILITY RATING AMONG GOP PRIMARY VOTERS

gov #palin featured speaker at cambridge union society

Highlights include a debate involving comedian, actor and activist Stephen Fry, American politician Sarah Palin, leader of feminist movement FEMEN Inna Shevchenko and journalist Jon Snow.

Celebrating its 200th anniversary, the Cambridge Union Society has today released its first termcard of 2015.

The major speakers confirmed so far include British comedian/presenter Stephen Fry, former vice-presidential candidate Sarah Palin, leader of the international feminist movement FEMEN Inna Shevchenko and Channel 4 News Presenter Jon Snow.

Reflecting on the varied fields of the revealed speakers, Amy Gregg, President of the Union for Lent 2015, commented: “I’m extremely pleased that we have begun our Bicentenary year with such a diverse range of prominent speakers. As ever, the Union strives to offer members the opportunity to engage with some of the world’s most significant and influential public figures.”

IMG_20150112_131721

Controversial American politician Sarah Palin will then speak on the 2nd of March. The first female Republican to be nominated for the Vice Presidency, during the 2008 Presidential election, Palin has more recently spent time as a political commentator for Fox News, and has starred in ‘Sarah Palin’s Alaska’, her own reality show. Her book, ‘Going Rogue’, has sold over two million copies.

On the 13th of March, journalist and Channel 4 news presenter Jon Snow will speak. A well-renowned journalist, Snow has received numerous awards for his work including five Royal Television Society Awards. Union members can expect to hear about a range of current topics in his talk – last year, Snow’s work involved a head-to-head with Russell Brand and ground reporting from the conflict in Gaza.

Other prominent speakers include composer Stephen Sondheim, who will appear via video-link, feminist author and theorist Germaine Greer and illustrator Sir Quentin Blake.

The Cambridge Student: The Union will also be celebrating its 200th anniversary with a series of bicentenary-themed events, including two debates and the Bicentenary Ball ‘A Night in History’

Cambridge Union Lent 2015 Magazine